How to Cancel a Credit Card

We’ve all seen the television commercials or print ads for major credit card providers featuring a frustrated client cutting their card in half with a large pair of scissors. The ads are a call-to-action of sorts, often promoting a new or enhanced credit card with lower rates, more options, better rewards, and so on. Now, if only cancelling a credit card were that easy…

Before you brandish the scissors and cut to the chase, so to speak, there are many important steps to learn and understand. If followed properly, not only will you be able to cancel the credit card, but your personal credit score will be untouched.

1. Establish contact

The process of cancelling a credit card begins with a bit of research on your part. First, you must find the customer service number for your credit card provider. This information can be found on the company’s website, your statement, and on the back of the card itself. You may also need the company’s mailing address; this too can be found both online and on your statement.

2. Claim your rewards

Many credit cards offer certain rewards and perks, and if you exit the program, you may be unable to claim some or all of them. This, unfortunately, may be unavoidable, but there are ways to mitigate this risk. Take some time to verify your balance and determine if you are eligible for any rewards. If your credit card’s rewards involve points for travel loyalty programs, such as Air Miles or Aeroplan, you may be able to redeem them for merchandise.

Some issuers allow for reward points to be used for credit on your monthly statement; check the provider’s website for more details. Redeeming rewards may be easier if you have a cash-back credit card. The only catch is that you may be required to attain a certain threshold of points or total purchases before you can claim the rewards.

3. Balance the balance

When cancelling a credit card, it’s important to pay off the balance in full before you close the account. Should you be unable to do so, you can ask to have the remaining balance transferred over to another credit card. If you do not want any further charges or interest to accumulate on the card, contact your provider and have them freeze it until the balance is paid off in full. If you carry a balance on your card from one moth to the next, you will be required to pay off the entire balance for the next two months in order to clear it and prevent further interest charges.

4. Call the issuer

Once you’ve claimed your rewards and paid off your balance, it’s time to inform your issuer of your intentions. Get confirmation that your balance has been cleared and state that you wish to cancel the card. The method in which this request is processed differs from one issuer to the next; some allow you to cancel the credit card without even making a phone call, while others may be hesitant to let you walk away.

If your provider is giving you a hard time, the best thing to do is deflect the negativity as much as possible. Remain as firm as you can; it is your right to cancel the credit card. Be sure to let the representative know that the card is being cancelled at your request.

Once the request to cancel your credit card is processed, be sure to ask the representative for the company’s mailing address so that can you inform them in writing of your decision. You should also take note of the exact date and time of the conversation and a means of identifying the person who handled your inquiry for verification purposes. The more information you jot down, the easier it will be to verify the claim in case of a mistake.

5. Send a letter

Although cancelling your credit card over the phone usually gets the job done, there is an extra step you can perform for added insurance. This is not necessary, but it does act as a fail-safe in case the representative you dealt with made an error while processing your request.

If the representative supplied you with the issuer’s mailing address, you can send a short letter informing them of your decision to cancel the card. Make sure you include your contact information, account number and the details of the conversation. You should also add a means of payment verification; a copy of a cancelled cheque will suffice.

Before you mail the letter, be sure to make a photocopy of it for your personal records and request a return receipt to prove the issuer received the letter. This adds another level of insurance to the cancellation process.

6. The waiting game

Rome wasn’t built in a day, and credit cards aren’t cancelled on the spot. It might take several weeks or even a month before your request goes through. After about a month, check your account to confirm that it has been closed. If it has, you’re home free. But if not, you may have to call the credit card company once again to inquire about the status of your account. If a phone call still doesn’t solve the problem, you may have to file a dispute with Financial Consumer Agency of Canada (FCAC).

7. Grab those scissors

At this point, you’re probably eagerly waiting for your request to cancel the credit card to finally be approved. Once it finally is, give your credit report and account a check once again to verify the closure of the account. If it has been, you can safely pick up the scissors and emulate the people in those TV and print ads. When making those final cuts, be sure to cut all the vital pieces of information, including your name, the card number, the CVV code and the expiration date.

Despite being a lengthy process, cancelling a credit card should not have a negative impact on your credit score. If you took the time to ensure the balance was paid off and verify the closure of the account, your worries will be minimal.